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I can't imagine who would invest in these bonds. How is a county that is so hard-pressed that they don't want to pay anything for 15 years expected to be more responsible in 2027? This must be the junkiest junk that was ever junked out.

Politicians backload spending so the consequences show up after they have moved on. Some of the overly generous state & local government pension deals are a prime example. There are usually warnings, but people don't pay enough attention. Even adjusting for inflation, this is a terrible deal for Miami. Reason enough that there should be state constitutional prohibitions on such "creative" financing.

This is way over the top, but it is fairly likely that inflation over the next 20 years averages more like 5-7% rather than 2-3%, and that yield starts looking really crappy.

So you think the current Federal Reserve will be hit by an asteroid, and the replacements will be all new Keynesianists who aggressively pursue full employment? Inflation hasn't been as high as 3% in 20 years. There is literally no chance that 5-7% inflation is tolerated.

This loan is in the same spirit of the "zero down" (and worse) innovative loans passed out during the bubble. I wish the officials of Miami, Tampa and other cities that are victims of the "buy us a stadium, or else" shakedown would read the discussions here that have indicated there are no more cities to move a team to. Portland, nope. Indianapolis, nope. Las Vegas, nope. Montreal is probably the best candidate, and that's a very long shot. The Nationals got the last one.

Gold isn't the best measure of inflation, but food has gone up in price. If not for geological luck in finding lots of gas and oil here, their prices would be going up as well. $3.80 pump gas is pretty high, too.

This is way over the top, but it is fairly likely that inflation over the next 20 years averages more like 5-7% rather than 2-3%, and that yield starts looking really crappy.

So you think the current Federal Reserve will be hit by an asteroid, and the replacements will be all new Keynesianists who aggressively pursue full employment? Inflation hasn't been as high as 3% in 20 years. There is literally no chance that 5-7% inflation is tolerated.

The big news in monetary policy in the US has been the acceptance of a near-term acceptable inflation level of maybe 2.4%. Once the economy is in true recovery, which is reasonably likely within several years, that target will drop back to the 0-2% that central bank elites prefer. At some point, predicting the future is stupid, but to get to 5-7% over 20 years, you probably need 8-10% over the back 10, which seems terribly unlikely.

In that environment, no one will have any stomach for contractionary policy, and inflation will have to be tolerated to prevent falling nominal wages among the bottom 70% of the income dist.

"Will have to be" is an assertion without argument. Since you have already mentioned Euroland, you can see that their central bankers seem to be perfectly willing to tolerate crisis-level unemployment in service of low inflation. Contraction has been the policy of Europe and England since the crash. The central bankers in the US have barely broken the 2% barrier in expectation in response to our labor market crisis. I don't understand the logic by which they'll allow inflation heading toward 8% in response to a stronger labor market than the one we saw in 2009-2011, and a much stronger labor market than Europe's.

Speaking of which, how do people feel about the Euro's value? I thought we were going to see some serious downward action by now.

Every currency in the world is trying to devalue versus every other currency.

Re (30) (33): the issue is we may have transitioned to a regime where this is the recovery. We may well be in Euroland now where 1-2% growth is a good year.

In that environment, no one will have any stomach for contractionary policy, and inflation will have to be tolerated to prevent falling nominal wages among the bottom 70% of the income dist.

Let me be clear that I don't necessarily disagree that tolerating higher inflation would be better policy (not as high as 7%, but certainly as high as 4%). However, there is absolutely zero chance that our current policy setters would tolerate inflation above 3%. It's taken four years of hysteresis in the unemployment rate for the Fed to state that they are comfortable with 2.5%.

If Bernanke wanted to, we would have had 4% inflation in 2010-2012. That was the time that conditions MOST called for inflation, and it was resisted. It's taken five years for seven members of the Fed Board to be comfortable with 2.5% inflation. I have no idea beyond an asteroid what it would take for them to tolerate 5%.

"Will have to be" is an assertion without argument. Since you have already mentioned Euroland, you can see that their central bankers seem to be perfectly willing to tolerate crisis-level unemployment in service of low inflation. Contraction has been the policy of Europe and England since the crash. The central bankers in the US have barely broken the 2% barrier in expectation in response to our labor market crisis. I don't understand the logic by which they'll allow inflation heading toward 8% in response to a stronger labor market than the one we saw in 2009-2011, and a much stronger labor market than Europe's.

You're speaking like the Fed is acting with restraint. It's not. It's printing money as fast as any died-in-the-wool Keynesian would dare. The only reason we don't have more inflation is a broken banking system (especially over-concentration of deposits in 5 financially weak, over-regulated, monster-banks), and lack of demand because no one has any confidence in this economy.

Let me be clear that I don't necessarily disagree that tolerating higher inflation would be better policy (not as high as 7%, but certainly as high as 4%). However, there is absolutely zero chance that our current policy setters would tolerate inflation above 3%. It's taken four years of hysteresis in the unemployment rate for the Fed to state that they are comfortable with 2.5%.

If Bernanke wanted to, we would have had 4% inflation in 2010-2012. That was the time that conditions MOST called for inflation, and it was resisted. It's taken five years for seven members of the Fed Board to be comfortable with 2.5% inflation. I have no idea beyond an asteroid what it would take for them to tolerate 5%.

They're printing money like drunken sailors. I don't see what more he could have done to get to 4% inflation.

Frankly, I think the Fed would love higher inflation. They're just talking restrained targets to keep Treasury debt cheap, and keep things from getting out of control.

They're printing money like drunken sailors. I don't see what more he could have done to get to 4% inflation.

Frankly, I think the Fed would love higher inflation. They're just talking restrained targets to keep Treasury debt cheap, and keep things from getting out of control.

Bernanke specifically stated during the crisis that there was a 2% inflation target. Markets knew that if inflation significantly outpaced it, the Fed would cease printing money. The Fed has tremendous credibility on inflation built over the last 40 years.

And Ben Bernanke certainly never thought he was out of ammunition.

From his speech: "Deflation: Making Sure ‘It’ Doesn’t Happen Here":

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

Bernanke specifically stated during the crisis that there was a 2% inflation target. Markets knew that if inflation significantly outpaced it, the Fed would cease printing money. The Fed has tremendous credibility on inflation built over the last 40 years.

And Ben Bernanke certainly never thought he was out of ammunition.

And I think the markets are wrong. I don't think the Fed will induce a recession to keep inflation from going to 4%.

I think a 30-year Tsy at 3.13 is one of the great sucker bets of all time. It's only because the US is so broke that they keep issuing short-maturity debt. If they were smart, the Tsy would be selling 30-year bonds like hotcakes. Hell, I'd introduce 40-year and 50-year bonds and see how dumb yield hungry investors really are.

Basically, the US can't fix it's fiscal issues (democratically) without major inflation over the next 30 years.

They don't call him "Helicopter" Ben Bernanke for nothing.

He clearly wants the market to believe that. It doesn't mean it's true. Japan has been incapable of generating inflation for 20 years.

I think a 30-year Tsy at 3.13 is one of the great sucker bets of all time. It's only because the US is so broke that they keep issuing short-maturity debt. If they were smart, the Tsy would be selling 30-year bonds like hotcakes. Hell, I'd introduce 40-year and 50-year bonds and see how dumb yield hungry investors really are.

I emphatically agree with you. If you think 3% is a good deal, I'm willing to issue all kinds of debt at that price. Not too tough to beat inflation with a little elbow grease.

I think a 30-year Tsy at 3.13 is one of the great sucker bets of all time.

Well, I certainly agree with this.

It's only because the US is so broke that they keep issuing short-maturity debt.

Def do not agree with this. Operation Twist was designed to increase the amount of short-maturity debt as another means of growing the money supply.

Bernanke's academic speciality is the Depression. He's doing everything possible to make sure that the economy stays in his intellectual comfort zone.

I think this is a severe misread of Bernanke's policies and demonstrates a certain amount of ignorance of the Fed's decision making process. Bernanke took heroic efforts to prevent a second Great Depression, and basically no one gives him any credit.

The only reason we don't have more inflation is a broken banking system (especially over-concentration of deposits in 5 financially weak, over-regulated, monster-banks), and lack of demand because no one has any confidence in this economy.

You've got to throw lack of supply in there as well (if you're talking about demand for loans). It's been much harder for your average schmoe to get a loan for anything than it was 5 years ago for all the obvious reasons.

You've got to throw lack of supply in there as well (if you're talking about demand for loans). It's been much harder for your average schmoe to get a loan for anything than it was 5 years ago for all the obvious reasons.

But lack of supply is due to the FUBAR banking system. These huge, crippled, banks are hording reserves b/c the regulators are crawling all over them.

If you broke the big-5 banks into 15 well-capitalized regionals (and a handful of global transaction banks/processing companies), you'd see a big uptick in supply.

I think this is a severe misread of Bernanke's policies and demonstrates a certain amount of ignorance of the Fed's decision making process. Bernanke took heroic efforts to prevent a second Great Depression, and basically no one gives him any credit

.

Bernanke and monetary policy are the only actors on stage, as Congresses and Presidents fail to make necessary and long overdue decisions on fiscal policy. I wouldn't call his actions (or those of NY Fed chair Tim Geithner) heroic unless you are comparing them to the bottom feeders in the House, Senate and White House that have learned far too well (per de Tocqueville) that they can bribe the public with the public's money

Bernanke and monetary policy are the only actors on stage, as Congresses and Presidents fail to make necessary and long overdue decisions on fiscal policy. I wouldn't call his actions (or those of NY Fed chair Tim Geithner) heroic unless you are comparing them to the bottom feeders in the House, Senate and White House that have learned far too well (per de Tocqueville) that they can bribe the public with the public's money

Excellent point. Dielectric stacks have even more inherent value. I would like to purchase $50,000 of dielectric stacks, please.

I don't have $50,000 of dielectric stacks. However, I do have a controlling share in a bridge--connects the Wall Street area with the island featuring some of the most expensive homes in the country. Can I interest you in that?

I think a 30-year Tsy at 3.13 is one of the great sucker bets of all time. It's only because the US is so broke that they keep issuing short-maturity debt. If they were smart, the Tsy would be selling 30-year bonds like hotcakes.

Actually, the amount of debt which is in 10yr or greater maturity bonds's has gone up significantly since 2008. So yes, Treasury is locking in a lot of low yields.

I like how the price of gold is somehow the best measure of inflation.

Of course it is. It reflects light.

For some reason, I can't stop laughing over this.

I grew up in Miami, it's an awful place in every respect that doesn't involve nightclubs.

YR--if you're still around and feel like answering, why was that? I ask because while I've only been twice, and mostly to Miami Beach, but the climate was so incredible it would make up for a lot of blecch.

YR--if you're still around and feel like answering, why was that? I ask because while I've only been twice, and mostly to Miami Beach, but the climate was so incredible it would make up for a lot of blecch.

I'm obviously not YR, but I've also lived in Miami.

Miami and Miami Beach have long been treated as synonymous, but the two are worlds apart, and that's still true even after the recent building and redevelopment boom (finally) tranformed downtown Miami from flyover country to an actual destination. Despite the glamorous reputation, the city of Miami is one of the poorest and most corrupt major metros in the country. As of a couple years ago, there was an average of $2– or $3 million in Medicare fraud per day in Miami. And a billion-dollar transit tax that was passed about a decade ago has resulted in less mass transit.

By Miami standards, the stadium deal was actually quite good. The city at least got something tangible for the money being spent, rather than the money disappearing into the pockets of various well-connected cronies. (Miami International Airport infamously went years without luggage carts because the commissioners were fighting over who would get the kickbacks.)

I think a 30-year Tsy at 3.13 is one of the great sucker bets of all time.

I've been hearing some version of this for twelve years, and of course the bleating has been even louder over the last five years. What's weird in this particular instance is that the same person was responsible for this comment:

My problem with what is happening with monetary policy is per snapper that banks are borrowing at zero percent from the Fed and not loaning the money.

Okay, it is somewhat reasonable to point out that they're not loaning *enough* money out. But there aren't a ton of people looking for loans either. Interest rates for housing are at a 30 or 40 year low. You can say that there should have been more strings attached re: voluntary writedowns, but that wasn't really the Fed's area. Most of the stagnation there is due to DeMarco, the head of the FHFA, who has been extremely resistant to aggressive writedowns.

You can say that there should have been more strings attached to the money, but the fact that we're arguing about that and not the total collapse of the finance sector is evidence of Bernanke's success.

I've been hearing some version of this for twelve years, and of course the bleating has been even louder over the last five years. What's weird in this particular instance is that the same person was responsible for this comment:

Where's the contradiction?

You can have 1-2% real GDP growth with 5% inflation and then a 3.3% 30-year bond sucks really badly as an investment. Or you can have 3-4% growth with 5% inflation, and a 3.3% 30y yield still sucks. Or 2% growth with 3% inflation, and a 3.3% 30y yield still sucks.

There are lots of ways for a 3.3% 30y yield to suck, and very few ways for it to be good. I mean, yields now are lower than during the Great Depression where you had deflation boosting your real i-rate dramatically.

The only strings attached to the expansion of the federal money supply increase are the ones that we are pushing on.

We need writedowns, failures, lawsuits against internal lawyers who papered the crap sandwiches sold as quality securities, end of the community reinvestment act, etc.

And if banks haven't gotten healthy enough on the spreads with zero risk of borrowing from the fed at zero and then buying US government bonds at a 2% + spread over the past few years, they will never make it back. Let 'em crash!

It makes me long for the days my father ran an S&L under regulation Q, minimal SIPC insurance and no multifamily lending.

The only strings attached to the expansion of the federal money supply increase are the ones that we are pushing on.

We need writedowns, failures, lawsuits against internal lawyers who papered the crap sandwiches sold as quality securities, end of the community reinvestment act, etc.

And if banks haven't gotten healthy enough on the spreads with zero risk of borrowing from the fed at zero and then buying US government bonds at a 2% + spread over the past few years, they will never make it back. Let 'em crash!

I think this is a severe misread of Bernanke's policies and demonstrates a certain amount of ignorance of the Fed's decision making process. Bernanke took heroic efforts to prevent a second Great Depression, and basically no one gives him any credit.

Paul Giamatti did a great job playing Bernanke as a humble voice of reason in Too Big To Fail, which did a good job of showing the behind the scenes stuff in 2008. I think I may be the only one who saw it, though.

I grew up in Miami, it's an awful place in every respect that doesn't involve nightclubs.

I lived in Orlando for a spell a few years ago, and sometimes had to go to Miami for business (and as a pass-through for vacation destinations). It was quite odd to see, on a Tuesday afternoon, dressed-to-kill 20-somethings walking down Lincoln Road to the clubs.

YR--if you're still around and feel like answering, why was that? I ask because while I've only been twice, and mostly to Miami Beach, but the climate was so incredible it would make up for a lot of blecch.

8 months of summer is fun when you're 12 and want to play baseball all year but I got tired of sweating year-round. The whole area is a huge slab of asphalt. There are crowds everywhere, meaning you're perpetually dealing with hot, cramped, grouchy people, many of whom drive like half-wits, and that isn't even counting all the nonogenerians on the road. People are ####### *rude*. The beach and the club scene are great, really top-notch, and I'd say if you were 25 looking for an amazing few weeks come on down, but I did that scene for years, if you're doing the same crap at 35 you were doing at 25 you've probably screwed up somewhere along the way.

Still better than living in Memphis, but that's not a high bar to clear.

I lived in Orlando for a spell a few years ago, and sometimes had to go to Miami for business (and as a pass-through for vacation destinations). It was quite odd to see, on a Tuesday afternoon, dressed-to-kill 20-somethings walking down Lincoln Road to the clubs.

South Beach was a preening freakshow 20 years ago during my hardcore clubbing days and it's exponentially worse now. Don't get me wrong, it was a heap of fun especially if you're a sexy, stylish dancing machine like Young YR, but in terms of family-oriented quality of life I find Dade county in general to be the pits.

Also my favorite dance club was bought by pornographers who shoot movies there now.

Are you sure? I thought that building had some sort of landmark status, and it seems like a very expensive property to be used only as a porn set. (It was my favorite as well, so I'll be disappointed if you're right.)

The most bizarre part of Marlins Park is their attempt to bring a bit of SoBe to the park in the form of The Clevelander. But mere mortals can't just walk in, you need to buy a ticket to "watch the game" from inside that cave. That is assuming that you're not frolicking in the lap pool or dancing with the scantily clad mermaids.

Then there's the cognitive dissonance for guys who think of baseball to avoid going over the edge during romantic encounters. Hey, bring the whole family! The mind boggles.

All thanks to the largesse of the taxpayers of Florida. (Yes, the State of Florida kicked in a third(?) of the stadium financing so my money is tied up in there as well.)

Are you sure? I thought that building had some sort of landmark status, and it seems like a very expensive property to be used only as a porn set. (It was my favorite as well, so I'll be disappointed if you're right.)

EDIT: Looks like The Cameo is alive and well.

I never said it was just a porn set, it's still a club but they shoot porn in the upstairs apartments (you do remember those doors upstairs behind the balconies yes?). Just look at the link you cited - did The Cameo have lap dance days on their schedule back when you attended?

IIRC it was purchased by the same group of smut peddlers that made Kimbo Slice world famous in the fighting world,

Cameo has been owned by the Opium Group for several years, and they're not "smut peddlers." In fact, the top hit when Googling "Opium Group" and "Kimbo Slice" is a story about Kimbo Slice complaining he was treated like crap at a club owned by the Opium Group.

Either way, it's not a big deal. I just doubt they could be shooting porn at the Cameo without there being some stories about it. As you know, the clubs in that building were largely responsible for putting South Beach on the map way back when.

(A little trivia for the people bored by this tangent: The Cameo is located next to Ace Ventura's apartment in Ace Ventura: Pet Detective, and it made a — ahem — cameo in the movie.)

Cameo has been owned by the Opium Group for several years, and they're not "smut peddlers." In fact, the top hit when Googling "Opium Group" and "Kimbo Slice" is a story about Kimbo Slice complaining he was treated like crap at a club owned by the Opium Group.

Meh, if I'm wrong I'm wrong, my interest in either pornography or clubbing is enormously attenuated in my dotage. There was an article in the New Times, I think, covering this story in the early-aughts that brought it to my attention but I must have recalled the details incorrectly. Since The Cameo is briefly visible in Ace Ventura (he lived in the apartment complex next door) I've now lost a fine anecdote. Shame on you.